In this episode of Think Fast, Talk Smart, host and Stanford Graduate School of Business lecturer Matt Abrahams interviews David Demarest, lecturer and Stanford University’s former Vice President of Public Affairs, on why knowing your values and the concerns of your stakeholders will lay the foundation for any communication during a time of crisis.
“Knowing your values gives you a beacon, or a lamppost, that can inform how you’re going to prioritize your actions,” Demarest says.
Think Fast, Talk Smart is a podcast produced by Stanford Graduate School of Business. Each episode provides concrete, easy-to-implement tools and techniques to help you hone and enhance your communication skills.
Matt Abrahams: Whenever you listen to the radio, watch TV, or browse the Internet, you are bombarded with crises of all types. While these crises – political, health, social – play out on a global stage, many of us struggle with crisis situations of our own. Today, I look forward to our discussion of crisis communication. I’m Matt Abrahams, and I teach strategic communication at Stanford Graduate School of Business. Welcome to Think Fast, Talk Smart: The Podcast. I am so excited to be joined by David Demarest, who is a lecturer of management at the GSB.
Prior to the GSB, David served as White House Communications Director for President George H. W. Bush and was a member of the White House senior staff. Next, David served as Executive Vice President and Director of Corporate Communications at Bank of America and then as Executive Vice President for Corporate Relations and Brand Management at Visa International. Later, he became Stanford’s Vice President for Public Affairs and oversaw communications and government relations and events. Beyond teaching at the GSB, David is finishing his book about life is like working in the White House. Welcome, David. Thanks for joining me.
David Demarest: Hey, thanks, Matt. It’s great to be with you, and this is going to be fun.
Matt Abrahams: I agree. There’s so much for us to discuss. Should we get started?
David Demarest: You bet.
Matt Abrahams: Question one. When it comes to crises, you’ve had to deal with a few, for sure. Can you highlight one or two that you’ve dealt with and any learnings that have come from those experiences?
David Demarest: Well, sure. You mentioned I worked at Bank of America. One day, I came into the office, and one of my staff told me that due to a data processing center foul-up, we had lost 1.2 million automatic credits and automatic deposits. That’s a lot of transactions to lose, and they were all in California. And it meant that people’s mortgage payments weren’t going to happen. It meant that their paycheck didn’t get deposited – things like that. It meant that a lot of insufficient funds checks might be going out. And it was an incredible mess. This was a formula for a whole lot of very angry customers.
Well, what we were able to do was to disaggregate what were the accounts that might have been more easily remediated by virtue of if somebody had a Bank of America account for their payroll deposit and a Bank of America account for their mortgage payment, we could intercept that transaction in-between and fix it. And what it meant was that we could get those transactions down to a manageable level of the ones that we really couldn’t address in the short term. So by the end of the day, we had narrowed it down to about 69,000 insufficient funds notices that were going to go out.
So that meant that our focus could be what are we going to do about those people and come up with a remedy for them that made sense and get our apology notes out to them and so forth. It told me that you need to be able to disaggregate a problem into its component parts and deal with the parts that are most critical. The second crisis I would put out there was that at Stanford, we had a laptop that was stolen. And it contained a lot of employee personal data – like thousands of employees’ personal data. We didn’t know if it was stolen for the data or if it was just stolen because it was a laptop.
That didn’t really matter. By the time we figured out what was on the computer, we knew that we had to do a public announcement as a notification. But it was already late in the day on Friday – not the time when you want to do a public announcement. People think you’re trying to hide the information. So our choice really was to do it then or do it Monday. Also, on Monday, we’d have all the systems in place – the toll-free number, what we were going to do about identity theft, and things like that. We made the choice to go on Friday at 6:00 P.M.
And we did that because we felt that people’s trust in us trumped the efficiency of waiting until Monday – that if anyone had their identity stolen over the weekend and they found out that we knew about this breach, but we didn’t talk to them about it when we knew about it, that would be a violation of the trust. And it came down to trust beats efficiency.
And in our communication, we told people that we won’t have the toll-free number set up until Monday. We won’t have the identity theft remediation set up until Monday. But we felt it was important to get this information out as soon as we knew what the circumstance was because we didn’t want to risk someone not being able to take an action on their own to try to protect themselves.
Matt Abrahams: Thank you for sharing those two. I hear two lessons that you learned. One is in a big, complicated crisis, it’s to your advantage to break it down into its constituent parts. And it sounds like having a platform and technology that can help you doesn’t hurt in that situation. And then the other piece is to know your values that you as an organization have and really challenge yourself to live by those values and that must help be a guiding light.
David Demarest: Yeah. I think too many organizations haven’t spent enough time really thinking about what would they do in a circumstance that called upon them to act without knowing all of the details of the situation. The pressure to act can be intense, and that’s why knowing your values is so important. Because it gives you a beacon or a lamppost that can inform how you’re going to prioritize your actions.
Matt Abrahams: Let me ask you the second question. When communicating about a crisis, what are some best practices to keep in mind when you’re actually sending the message out?
David Demarest: I think the key here is that a) you’ve got to know what you don’t know. And so you have to have kind of a catalog of information that you would like to know but maybe you don’t know and how important is that information, which leads to don’t speculate. People speculate as to what might be the case, not necessarily what is the case. And then -- you mentioned it earlier – know your organization’s values and be guided by them. Companies and organizations that have a solid sense of who they are and what they stand for, they will be able to navigate a crisis much more effectively than those companies or organizations that don’t.
And I even tell my students this, Matt, that if you know as a person what your values are, in this crazy, turbulent world that we live in, you’ll be able to navigate it a lot better than to always be situational. Finally, if there’s a necessity for apology, and often there is, that apology has to be timely. It’s got to show true regret. The organization has to take real responsibility – in other words, ownership – and if possible, provide a remedy. And that’s what we did in the case of the stolen laptop. We did provide a remedy to people, which was identity theft protection. And we did that quickly.
Matt Abrahams: Thank you. I know you have some very specific ways of thinking about audience engagement. Can you share what this looks like from your perspective?
David Demarest: I think that if we take Stanford as an example – but it applies to pretty much any organization – all organizations have multiple constituencies. So in Stanford’s case, as you well know, we have students. We have faculty. We have donors. We have alumni. We have the federal government, who supplies us with a billion dollars of research funding every year. We have the local community and so forth. And so every organization has multiple constituencies that care about how the organization interacts with them, some more than others.
So part of effective crisis management is to have your finger on the pulse of each one of those constituencies and what elements of the crisis are going to be germane to which constituency to a greater or lesser degree. So you start to have a stakeholder map in a sense. And then that allows you to know what their concerns, what their fears are, what their anger quotient might be if something has affected them very directly.
And then the next step is to go where they are. You can’t sit back and wait for them to come to you. You have to go to them and basically listen to them, ask for their guidance as to what it is that is of concern to them and how can they help you meet their concerns. So it’s a much more proactive engagement with stakeholders than to simply tell people what you’re doing and then hope for the best.
Matt Abrahams: Right. So your audience engagement approach is similar to what we’ve talked about prior on this podcast, which is really know your audiences and understand what it is that’s important to them. You’re doing this very proactively. In case something bad happens, you know, and you’re engaged with them prior. And I also heard you say be very mindful of the different methodologies, tools, and modalities with which you can connect to them and leverage those so you can get your messages out quickly and proactively.
I need to figure out how I can affect the anger quotient of some of the people that I live with in my house. I’d like to reduce that a little bit, so you’ve got me thinking about that for sure. We’ve talked about knowing your values, knowing your corporate values. We’ve talked about knowing your audience and engaging them. What are other things people can do proactively to prepare for a crisis that might arise?
David Demarest: Well, I’d say two things. One, there are certain crises that happen that are impossible to foresee in very concrete terms. People aren’t going to blame Stanford if there’s an earthquake. What they will blame Stanford for is if we’re not prepared, knowing that we’re in an earthquake zone. And when I think about how people think about crises, I would suggest that they do an inventory of what are the worst things that can happen, and are we prepared for those things. That’s part one. Part two is don’t drink the Kool-Aid.
A lot of people in organizations, particularly leadership in organizations, fall into the trap of having an organizational bias in favor of their organization – “Oh, we would never do that.” And that is a dangerous trap because it is one of those things that when a leader really doesn’t embrace, “Oh, we have to really get to the facts of this case, not just what our preconceived notions are about how good our organization is.” So you have to put yourself in the shoes of someone who might have an alternative view of your organization. And that takes a little bit of hard thinking because – I love working for Stanford. I’ve been there 16 years.
And it would be easy to think, “Oh, well, Stanford would never do this or never do that.” Well, you’ve got to be able to put yourself in the shoes of somebody who might not think the way I do about the university or about my organization. Sometimes you’ve got to think like an adversary or you have to think like a reporter and get yourself out of your comfort zone and think in ways that a critic would think.
Matt Abrahams: Very useful ideas. And in fact, the last idea about seeing the situation from somebody else’s perspective echoes something Bob Sutton shared on our podcast in terms of team meetings and group decision making. It can always benefit to have that other perspective and, as you’ve said, to make sure that we’re not drinking the Kool-Aid. And I think reflecting on what could go wrong, while maybe depressing and concerning, is a great thing to do, again, in the name of being proactive in preparation. I’d like to change the topic a little bit.
You’ve spent a lot of your life in the political world, and you even teach a course on political communication. Looking at our current political landscape, what advice do you have for people who are trying to push a political agenda that is important to them, such as equity, energy, employment? What advice might you have?
David Demarest: We live in a remarkably polarized environment politically. And it is very difficult to have conversations, metaphorically, across the aisle. And people seem to be entrenched in their own world view. It’s a tough arena to navigate within, but I think if you’re going to be successful in trying to expand support for your cause or your agenda, you have to refrain from the temptation of being too judgmental about those who might not buy into what you’re trying to sell. And try to understand why, at a deeper level, what’s their concern about it, and then make your case on their terms, not yours.
You’ve got to be thoughtful about what avenue you can take to try to break through some of, perhaps, a rigidity of view on the other side. But coming at it from a different angle might be a little bit more persuasive than simply jumping up and down and saying, “You’re the devil incarnate.” The second half of that is for your supporters, it’s really about moving them from just being supportive to action. And that means communicating urgency. And how you communicate urgency is to make sure that they see the present-day merits of dealing with a particular problem.
Matt Abrahams: I really like how you separate those two points. The thing that really resonated with me was the notion, initially, of framing your point in the language and the approach that the people you’re trying to convince are taking, rather than, “It’s my idea, and you should see the world the way I do.” Try to appreciate the way the other people see the world and put your communication in that perspective.
And then the second part, there – this notion of urgency and driving action. A lot of us feel that, “Hey, if I just share the information, that it’s inherent and intuitive that action should follow.” But building that sense of urgency – providing a pathway to action – becomes very important.
David Demarest: I remember back at my Bank of America days, the CFO was the person that I ultimately reported to. And when I would talk to him about reputation management, he’d kind of glaze over. Because I wasn’t talking in a language that he could really relate to. So I changed my language to be one about risk management. That was a concept that he was very familiar with. And that enabled me to have more fruitful conversations with him about the steps that we needed to take when we had to deal with reputational risk, business risk, financial risk, and so forth.
Matt Abrahams: That last point you made about the linguistics of it leads me to my next question, which I know you and I share as something that we are passionate about and concerned with and teach about, and that is the language you use and the rhetoric involved in communication. What thoughts do you have of the importance of our words? And does anything change as a result of our communicating virtually rather than in person?
David Demarest: Yeah. Those are really two great questions. I love language. One of the modules in my class is about language and rhetoric. And when you think about language and you look at some – I don’t mean to get too esoteric here, but the word strategy, for example, comes from the Greek word strategos, which means a general. And the word tactics comes from the Greek tactos, which means arranged in order. The difference between strategy and tactics, then, you kind of can bring to life by talking about their derivation.
So language is really what we use to provide information, to make an argument, to motivate behavior, paint a picture, tell a story. All of those things are essential to bringing your issue to life – in other words, first building and understanding of one’s agenda. I think generally speaking, those principles are applicable to the virtual world. Crisis management is indeed much more complicated with the advent of social media. We all know that. Speed is essential because social media creates a narrative so quickly that people can mobilize faster. Bad news travels faster than it used to. Misinformation can spread like wildfire.
So you have to understand the platforms that we are all living with, and you’ve got to communicate to people in those spheres. It used to be a communications rule – never repeat the accusation that’s made against you because that just reinforces the accusation. Well, in the virtual world, if you have an answer to an accusation, and you don’t put the accusation in your talking points or your FAQs or whatever, somebody searching for that issue will never find your answer.
So just using the right words so that they are optimized for search, we have to be sophisticated and know that people are going to go to the web to find out information about a particular issue or crisis. And you’ve got to use the language that they would likely use in their search. It’s little things like that that I think can help us deal with crisis management in the virtual world.
Matt Abrahams: Absolutely. And the notion of really thinking about wording and the exact language you use is so powerful. Most people focus on, “Here’s what I want to get across,” but if you spend just a little extra time of thinking about how do you use certain words to help you get that information across, it can be incredibly powerful. I joke with people. I have a 17-year-old son. He’s just gotten his driver’s license. He wants a car. You cannot today, David, buy a used car. You can buy a certified previously-owned vehicle, but you can’t buy a used car. It’s the same car.
But calling it a certified previously-owned makes it sound different and better, and they can charge more for it. So this notion of choosing language wisely to help you further your goal, I think, is really important. And I know you and I both share that. And I hadn’t thought about how detailed you have to get in your thinking when it comes to the virtual world and how people actually search for the things that you’re putting out there. It makes a lot of sense to me. Before we end, I’d like to ask you the same three questions I ask everyone who joins me. Are you up for that?
David Demarest: I’m ready.
Matt Abrahams: All right. Question number one. If you were to capture the best communication advice you ever received as a five-to-seven-word presentation slide title, what would it be?
David Demarest: I’m not sure I can keep it to five to seven words, but I think I can get close. Worry about being right at the end of the meeting, not at the beginning of the meeting.
Matt Abrahams: Tell me more, but I like that a lot. I’ll let you have the extra words.
David Demarest: Well, I think when it comes to leadership, listening is more important than talking. And when you’re leading a group of people or when you’re meeting with a group of stakeholders, before you articulate your view, it’s probably better to listen to other people’s views. If you’re leading a team of people and you’re in an authority role, if you lead with what you think, you can bet your bottom dollar that people will echo that.
I used to watch the first President Bush in cabinet meetings. He never showed his cards when he was talking about a policy issue. He would always make the cabinet talk about what their views were, and then he would go back to the oval office and he’d make a decision. If he had said, “Well, I don’t think this policy should be this or that,” every one of those people would be saying, “Oh, Mr. President. You’re so smart. You’re so brilliant.” That’s just the nature of things. But I think the point of it is listen first, talk next.
Matt Abrahams: Yes. Words to live by, for sure. Let me ask you question two. Who is a communicator that you admire and why?
David Demarest: I’ll give you two – Gandhi and Lincoln.
Matt Abrahams: Okay. And share why.
David Demarest: Gandhi because he was able to inspire a movement of hundreds of millions of people against colonialism in India, and he did it in large ways through communicating through his book about seeking independence and then speaking and writing essays.
And Lincoln, who I think -- had he been able to serve out his second term, I think we would live in a different country today. All you have to do is read his second inaugural address about, “With malice towards none and charity for all.” It’s a beautiful address. And he did it in so few words, just like the Gettysburg Address, that it was so powerful that he was able to capture what I think was a hopeful vision of what this country could be.
Matt Abrahams: Absolutely. Two wonderful communicators who did amazing things for this world. Last question. What are the first three ingredients that go into a successful communication recipe?
David Demarest: Okay. I’ll be too cute by half here. Context, context, context. Knowing the contextual environment of your circumstance, whether it’s a crisis, whether it’s your reputation, whether it’s your brand – having a really rigorous understanding of the contextual environment is the foundation of coming up with effective strategies and achieving your organization’s goals.
Matt Abrahams: Context is absolutely critical, as were the topics that we discussed today, David. I can think of no one better to help us understand how to communicate in the times we live in than someone like yourself who has experience in both crisis management and crisis communication as well as political communication. Thank you so much for your time, for your insight, and for your advice.
Thank you for listening to Think Fast, Talk Smart: The Podcast, a production of Stanford Graduate School of Business. To learn more, go to gsb.stanford.edu. Please download other episodes wherever you find your podcasts.